Central Bank of Kenya has accepted the final offer from KCB Group to takeover Imperial Bank Limited (in receivership).
The offer includes a further recovery of 19.7 per cent of eligible depositor balances remaining at IBLR.
Further, it reveals that KCB has confirmed it will take over five branches of IBLR. In a joint announcement with Kenya Deposit Insurance Corporation, CBK said the offer will enhance recovery for depositors.
“CBK and KDIC assess that KCB’s Binding Offer represents a viable proposal for the further resolution of IBLR, for the benefit of depositors… It is expected that the transaction will be concluded with speed,” the two agencies said.
IBLR has been under receivership since October 2015 after it was found to be operating two sets of books, with a potential fraud of Sh44.9 billion.
Shareholders were accused of irregularly paying themselves Sh2.7 billion as dividends. Last year in December KCB group announced plans for a complete takeover of Imperial Bank by March this year.
In the same month, the regulator and KDIC announced a release of funds increasing total recovery to approximately 35 per cent of original eligible deposits held at the date of receivership.
According to the final offer, released yesterday, 12.5 per cent of the remaining balances due to eligible depositors will be released on completion of the signing of the agreement.
A second 12.5 per cent will be released on the first anniversary of the signing while 25 per cent each on the second, third and fourth anniversaries respectively.
Previously, funds were made available in three tranches, and approximately 92 per cent of eligible depositors had been granted full access to their balances.
This is after the two state agencies announced a 12.7 per cent offer to the depositors accessed within 14 days in December last year.
The offer added up to Sh8 billion by December 24. Interest rates payable on deposit balances will be in line with existing deposit products.
However, the recovery does not include the realisation of approximately Sh36 billion of loans. This translates to 50 per cent of the current loan balances, linked to ongoing litigation.
While at that, CBK and KDIC also announced plans to involve other banks to verify and consider uptake of the remaining loan assets to enhance further recovery.
